A recent news article in the Wall Street Journal discussed the recognition by the Internal Revenue Service of the tax exempt status of the Church of Scientology. The Church of Scientology was recognized as tax exempt after establishing that it was an organization operated exclusively for religious and charitable purposes. Recognition was based upon voluminous information provided by the Church regarding its financial and other operations to the Internal Revenue Service.

Washington -- The Internal Revenue Service today announced that interest rates for the calendar quarter beginning Jan. 1, 1998, will remain at eight percent for overpayments, nine percent for underpayments, and eleven percent for large corporate underpayments. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 will remain at 6.5 percent.

After a successful day of helping thousands of people across the country resolve their tax problems on Nov. 15, the Internal Revenue Service's 33 districts are gearing up for their second monthly "Problem Solving Day."

The Internal Revenue Service will test a new process to resolve certain tax-related disputes without legation when taxpayers are in bankruptcy. The test begins today and will be conducted in Arizona, Indiana, Massachusetts and the Texas counties that comprise the Houston IRS District.

Taxpayers in 33 cities are invited to Problem Solving Day on Saturday, Nov. 15, 1997, from 9:00 a.m. to 5:00 p.m. During this open house, individuals with long-standing tax problems who have had difficulty getting answers will have the opportunity to meet with IRS employees face-to-face.

TeleFile, the Internal Revenue Service's file-by-phone program, today received a $100,000 Innovations in American Government Award from the Ford Foundation. TeleFile was one of ten programs recognized as setting a standard of excellence in government. The award will be used to further inform the public about the availability and advantages of this tax filing option.

The Internal Revenue Service released on schedule yesterday a draft Request for Proposal (RFP) for a prime systems integration services contractor for IRS's computer systems. This prime contractor would provide systems development and integration capabilities needed to implement IRS' Modernization Blueprint, which was submitted to Congress in May.

The Internal Revenue Service today announced that interest rates for the calendar quarter beginning Oct. 1, 1997, will remain at eight percent for overpayments, nine percent for underpayments, and eleven percent for large corporate underpayments. The overpayment rate for the portion of corporate overpayments exceeding $10,000 will remain at 6.5 percent.

Pre-tax profits reported on the 4.3 million U.S. corporation income tax returns for 1994 increased to $577.3 billion, 15.9 percent more than for 1993, according to the Summer 1997 issue of the Internal Revenue Service quarterly publication, the Statistics of Income Bulletin. The 7,043 returns of corporations with assets of $250 million or more accounted for nearly 77 percent of the total. Reflecting the increase in profits, total income tax after credits (which includes the "alternative minimum tax") increased from $119.9 billion to $135.5 billion. However, alternative minimum tax continued to decline, from $4.9 billion for 1993 to $4.5 billion.

Registration is currently underway for the Tenth Annual Institute on Current Issues in International Taxation sponsored by The Internal Revenue Service and George Washington University. The Institute, designed for professionals in international tax law, will be held Dec. 11 and 12 at the J.W. Marriott Hotel in Washington, D.C.

The Internal Revenue Service announced today the selection of Robert E. (Bob) Barr, currently the Vice President of Government Programs for Intuit Inc., as Assistant Commissioner (Electronic Tax Administration).

As result of more taxpayers with income of $50,000 or more, the average tax rate for 1994 individual income tax returns increased to 14.3 percent. Data on the tax rates for 1994 are presented in the Spring 1997 issue of the Internal Revenue Service quarterly publication, the Statistics of Income Bulletin.

The Internal Revenue Service announced today that it will not impose penalties through Dec. 31, 1997, on businesses that make timely deposits using paper federal tax deposit coupons while converting to the new electronic payment system. Under the law, taxpayers with more than $50,000 of federal employment tax deposits in 1995 are required to enroll in the Electronic Federal Tax Payment System (EFTPS) and to deposit electronically by July 1, 1997.

The Internal Revenue Service and the U.S. Department of Labor's Pension and Welfare Benefits Administration have granted extensions to pension and other employee benefit plans in the federal disaster areas of Minnesota, North Dakota and South Dakota. Plan administrators will have until June 30, 1997, to file required returns/reports.

The Internal Revenue Service today announced that interest rates for the calendar quarter beginning July 1, 1997, will remain at eight percent for overpayments, nine percent for underpayments, and eleven percent for large corporate underpayments. The overpayment rate for the portion of corporate overpayments exceeding $10,000 will remain at 6.5 percent.

Taxpayers no longer have to call the Internal Revenue Service to check the tax-exempt status of their favorite charity. Those with Internet access who want to make sure their charitable contributions qualify for a deduction on their tax returns can now check the names of nearly 500,000 tax-exempt organizations.

Corporations filed over 4.3 million active federal income tax returns for 1994, reporting $13.4 trillion in total receipts, $577.3 billion in net income (less deficit), $494.0 billion in income subject to tax, and $135.5 billion in income tax after credits.

The Internal Revenue Service today issued a revised procedure for taxpayers to follow when requesting permission to change their accounting method for federal income tax purposes. A change in accounting method usually involves the time when a taxpayer reports an item as income or takes it as a deduction. The new rules end many of the complexities in the five-year-old procedure they replace.

Internal Audit Review of the Use of Statistics and Protection of Taxpayer Rights in the Arkansas-Oklahoma District Collection Function

An Internal Audit was conducted at the request of the Acting Commissioner and Regional Commissioner, Midstates Region. It was begun Oct. 1, 1997, and was delivered to the Senate Finance Committee on Dec. 5, 1997. The report evaluates two aspects of the Collection field function in the Arkansas-Oklahoma District -- whether management’s use of enforcement statistics was appropriate and whether the use of statistics led to the abuse of taxpayers’ rights.

The Internal Revenue Service Commissioner's Advisory Group (CAG) will hold a meeting at the National Office; 1111 Constitution Avenue, N.W.; Washington D.C.; on Tuesday, May 20. The meeting will begin at 9:00 a.m. in Room 3313.

The Internal Revenue Service acknowledges with appreciation recent recommendations made by the Commissioner's Advisory Group aimed at reducing the number of unagreed small cases resulting from its office examination and service center programs.

The Internal Revenue Service will use teleconferencing technology to allow people outside the Washington, DC, area to participate in an upcoming regulations hearing. On May 15, 1997, people interested in commenting on proposed regulations on the amortization of intangible assets will be able to take part in the hearing at teleconference sites in Los Angeles, San Francisco, Dallas and Chicago, as well as Washington, DC.

As these sessions close on September 25, the Internal Revenue Service does not intend to simply lick its wounds and go home. Just as we want to set the record straight and refute allegations that we deliberately violate taxpayers rights or mislead as a matter of policy, it is clearly our responsibility to respond in a positive and constructive way to the valid criticisms we hear. And we have heard valid criticisms.

Internal Revenue Service employees must not only observe specific rules of conduct for themselves, they must also report any information they get on misconduct, corruption, fraud, waste or abuse committed by other employees. To assist them in fulfilling this obligation, the IRS Inspection Service offers both local and toll-free phone numbers for employees to report allegations.

The Internal Revenue Service has designated four private delivery companies that last-minute filers can use and have the same assurance as those who use the U.S. Postal Service that a return mailed on time is considered filed on time.

To best serve the public, employees of the Internal Revenue service must maintain the confidence and esteem of the American taxpayer. Each year IRS employees are required to certify that they are aware of the Standards of Ethical Conduct for Employees of the Executive Branch -- the IRS Rules of Conduct.

Facing its own "April Madness," the Internal Revenue Service today announced its version of the "Final Four." On the final four days of the tax filing season -- Saturday, Apr. 12 through Tuesday, Apr. 15 -- the IRS will open its tax help lines from 7:30 a.m. to 10:00 p.m., local time. The toll- free number is 1-800-829-1040.

Recent accounts in the media have both former and present Internal Revenue Service employees alleging the use of statistics as a means of evaluation for IRS enforcement officers. While the IRS does collect statistics of every kind, they are not collected for the purpose of evaluations.

The Internal Revenue Service is granting some tax relief to taxpayers in counties that have been declared disaster areas due to floods this month. This includes all of North Dakota and South Dakota. This same relief will apply in any additional counties in other states that are declared disasters because of these floods.

The Internal Revenue Service examines returns to ensure that the proper tax has been reported. In deciding how to allocate its limited examination resources, the IRS attempts to maintain examination coverage rates that provide an adequate enforcement presence in the various market segments in order to decrease the tax gap and foster an increase in voluntary compliance.

More than one million businesses are entering the age of electronic tax payments as they begin making their federal tax deposits by computer or telephone. Now, the Internal Revenue Service is taking an extra step to help them make the switch smoothly -- and with confidence. The IRS will not impose any penalties on taxpayers who enroll in the Electronic Federal Tax Payment System (EFTPS) and attempt to make the payments through the system before July 1, 1997.

The Internal Revenue Service touches the lives of almost every American. The IRS is striving to ensure that all taxpayer contacts are conducted in a courteous, respectful manner. The most important consideration for the IRS in these contacts is the protection of a taxpayer’s rights. The IRS has taken many steps in written rules, in policies, in training, in guidance and in evaluations, to ensure taxpayers’ rights are protected.

The performance of Internal Revenue Service employees is based on a number of critical job elements for each position. Each job element contains performance standards by which the employees’ yearly evaluations are determined.

With the tax filing deadline less than two weeks away, the Internal Revenue Service today reminded taxpayers that it has help for those who can't complete their forms on time or can't pay what they owe.

For 1997, total tax returns to be filed with the Internal Revenue Service are projected at 211.4 million returns, increasing to 226.7 million by 2003. Individual income tax returns comprise the majority of these returns, 119.9 million in 1997 and 129.7 million in 2003. Based on current planning assumptions, electronically-filed returns are projected to account for a growing percentage of individual returns, increasing from 16.4 to 20.1 percent. These and other statistics are reported in the newly released Winter 1996-1997 issue of the Internal Revenue Service quarterly publication, the Statistics of Income (SOI) Bulletin.

IRS employees must identify themselves by name when dealing with the public in the performance of their jobs. This applies not only to employees who provide information to the public via telephone or in person, but also to employees in Compliance functions -- tax auditors and tax collection officers.

The Internal Revenue Service tax help lines -- already available weekdays from 7:30 a.m. to 5:30 p.m. -- will be open from 10:00 a.m. to 2:00 p.m. on the next three Saturdays, the final weekends before the Apr. 15 filing deadline. But the toll-free number -- 1-800-829-1040 -- is not the only way to get IRS help.

In 1996, IRS expanded its information services beyond the traditional telephone and walk-in assistance to include a Website, TeleFax - offering forms and instructions by return fax - and a CD-ROM disk with forms and publications.

A month before the tax filing deadline, the Internal Revenue Service had already received a record number of electronic returns. Over 15 million of the more than 50 million returns filed as of Mar. 14 arrived via computer or TeleFile, the file-by-phone system.

People who fail to file tax returns are called nonfilers. Nonfilers don’t file returns for a number of reasons. They may not be aware of the need to file. They may have suffered a traumatic event in their lives, such as divorce or loss of job. Many stop filing because they simply cannot pay what they owe.

The Internal Revenue Service and the U.S. Department of Labor's Pension and Welfare Benefits Administration have granted relief to taxpayers in areas designated as federal disasters this month. Pension and other employee benefit plans will have until Apr. 30, 1997, to file required returns.

A person’s marital status may affect both the calculation of income tax owed and Internal Revenue Service actions to collect any unpaid taxes. Two concepts that may affect people in special circumstances are "joint liability" and "community property." In 1996, the IRS began a study on how these concepts affect taxpayers, especially those who are divorced or separated, and invited public comment on proposals addressing specific issues. The resulting report is under final review at the Treasury Department.

The Internal Revenue Service is granting some tax relief to taxpayers in counties that have been declared disaster areas due to storms this month. This includes parts of Arkansas, Kentucky and Ohio. This same relief will apply in any additional counties that are declared disaster areas because of these storms.

By law, information about your tax return is strictly confidential. This means that no one at the Internal Revenue Service may tell anyone -- whether your relative, a neighbor, a reporter, or another government employee -- anything about your tax return or your relationship with the IRS, unless the law allows such a disclosure. Section 6103 of the Internal Revenue Code lists specific circumstances when disclosures may be made -- for example, when the taxpayer gives written authorization.

The Earned Income Tax Credit (EITC) is a special credit for certain low-income taxpayers who work. It reduces the amount of tax owed and is intended to offset some of the increases in living expenses and social security taxes. A number of administrative and legislative actions have been taken to ensure that eligible individuals -- and only those individuals -- are able to claim the EITC. These actions taken together enhance the simplicity and verifiability of EITC claims. If eligibility rules are simple, taxpayers can more accurately claim the EITC and avoid costly errors. If eligibility rules are verifiable, the IRS can better ensure that the EITC is paid only to those who are eligible.

The Internal Revenue Service has good news for over 890,000 business taxpayers -- many of them May now be able to throw away the paper and file their quarterly payroll returns, Forms 941, by telephone. Like the TeleFile system for individuals, this free, paperless, telephone filing method automatically figures the tax and any refund or balance owed.

The Internal Revenue Service today announced that interest rates for the calendar quarter beginning Apr. 1, 1997, will remain at eight percent for overpayments, nine percent for underpayments, and eleven percent for large corporate underpayments. The overpayment rate for the portion of corporate overpayments exceeding $10,000 will remain at 6.5 percent.

The mission of Examination is to determine the correct amount of tax. The vast majority of cases are agreed at the Exam level because the taxpayer agrees with the proposed adjustment or because the return was correct as filed.

More people used the IRS file-by-phone system in its first six weeks of availability this year than they did throughout 1996. As of Feb. 21, the IRS had accepted over 3 million TeleFile returns, compared with 2.8 million for all of 1996.

The Internal Revenue Service will be working overtime to help taxpayers on the upcoming Presidents' Day holiday. The IRS will open its toll-free assistance line -- 1-800-829-1040 -- on Monday, Feb. 17, from 7:30 am to 5:30 pm local time, to answer questions related to tax forms.

Overview of Internal Revenue Service Programs for Tax Exempt Organizations

Within the Internal Revenue Service, the Office of Employee Plans and Exempt Organizations (EP/EO) has responsibility for providing uniform interpretation and application of the tax laws relating to tax exempt organizations, including related sections such as the private foundation and unrelated business income tax provisions. EP/EO also is responsible for provisions relating to the taxation of political organizations and for tax-exempt bond examinations. EP/EO is comprised of the Headquarters office and five key district offices (KDOs).

Thousands of parents in the process of adopting a child May be eligible for certain tax benefits on their 1996 federal income tax return, even if they don't have the taxpayer identification number for the child which Congress has required because the adoption is not yet final. To assist parents who are adopting a child comply with newly enacted laws, the Internal Revenue Service has set up a special temporary procedure to allow them to claim the dependency exemption or child care credit on their 1996 returns.

Most taxpayers file their tax returns and pay what they owe on time. If they don't, the Internal Revenue Service sends the taxpayer a bill. This begins the collection process. Along with the bill, the IRS automatically sends a Publication 1, "Your Rights as a Taxpayer," and Publication 594, "Understanding the Collection Process." These publications explain to taxpayers the various options and rights they have in dealing with the IRS.

The IRS examines (audits) tax returns to verify that the tax reported is correct. It is not an attempt to increase the tax. Selecting a return for examination does not suggest that the taxpayer has either made an error or been dishonest. In fact, many people May be surprised to know that many examinations result in a refund to the taxpayer or acceptance of the return without change, in addition to those that result in an assessment of additional tax.

The Internal Revenue Service announced today that it intends to make it easier for farmers who receive deferred crop payments to change their accounting method for alternative minimum tax (AMT) purposes. The change will begin with the 1997 tax returns to be filed in 1998, will not require payment of a user fee, and will provide audit protection for previous years' returns to those who have not received an audit letter on this issue before today.

Year by year, the Internal Revenue Service is working to make it easier for people to get tax help. The first place to look is right in the tax package. The package's new design makes it easier to find information. For those people with Internet access, the IRS's homepage has forms, publications and lots of helpful tax information. For those who don't have a computer, the IRS has special toll-free numbers for whatever help a taxpayer might need.

The Internal Revenue Service is granting some tax relief to individuals and businesses in the areas of several Western states that have been declared disaster areas due to recent floods. There will be no penalty for late payment of estimated taxes -- due Jan. 15 -- if the payment is made by Jan. 22.

Millions of American taxpayers will soon receive their 1996 federal income tax packages in the mail. The Internal Revenue Service is mailing about 65.5 million tax packages this year and expects to receive almost 120 million individual income tax returns in 1997, with continued growth in filing by telephone and electronically.

The Internal Revenue Service will send about 65.5 million income tax packages this year. Most taxpayers will get their forms soon after New Year's Day. The IRS expects to receive almost 120 million tax returns in 1997, with continued growth in filing by telephone and electronically.

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